An investigation has found an Aberdeen City Council team leader was able to embezzle £1.1million over nearly two decades because officials ignored rules put in to prevent crime.
Fraudster Michael Paterson, 59, intercepted council tax refunds due to householders and instead issued them to himself, splashing the cash on lavish holidays, meals out and expensive shopping trips.
He got away with £1,087,444 during the years-long swindle, and made a total of 655 council tax refund payments to his own account, but was finally caught - and subsequently jailed for four years - when an employee spotted a suspicious refund in the system and raised the alarm.
Now, an investigation by watchdog the Accounts Commission has found rules specifically put in place to prevent such crimes were not followed.
The Times reports Andrew Burns, deputy chairman of the commission, warned Scotland’s 32 councils “to learn from this prolonged and significant fraud”.
He said: “It isn’t enough to have controls to counter fraud; checks need to be followed, weaknesses identified, and routine testing of systems carried out.
“This case shows the risks when internal controls aren’t followed.”
However, Burns praised the member of staff who spotted the swindle, adding that their conduct “shows the value and importance of whistleblowing policies and procedures”.
Explaining why the fraud went undetected for so long, Burns said: “There wasn’t an appropriate segregation of duties between senior members of staff. There were controls on paper but they were not being followed through in practice.”
Aberdeen City Council identified improvements to make immediately after Paterson was caught, and has said there will be no loss to taxpayers affected.
The local authority said it would "carefully examine" the findings of the Accounts Commission investigation, including recommended actions.